KATHMANDU, NEPAL -- For a decade, he carried a 9mm pistol and battled government forces in almost every corner of Nepal as part of a Maoist insurgency that ravaged this majestic Himalayan nation.

Today Basudev "Pawel" Ghimire and thousands of other rebels live in U.N.-monitored camps -- their guns locked away, at least for now. They are the most visible symbol of a political stalemate that has brought Nepal to an awkward and volatile standstill.

A 2006 peace agreement and a surprising Maoist victory in 2008 elections earned the rebels' political party a central role in governing the country. But the Maoists and the Nepalese military and political establishment have been unable to agree on a deal to allow the Maoists to govern.

The resulting deadlock has disrupted life in this nation of nearly 30 million people, and caused jitters from Kathmandu to Nepal's two giant neighbors, India and China.

The latest casualty was Prime Minister Madhav Kumar Nepal, who resigned last week after failing to solve the political dilemma, including how to reintegrate the Maoists and their highly trained soldiers into Nepalese life and governance.

Maoist leaders are demanding that all 19,600 members of their People's Liberation Army be accepted into the same national security forces they once battled.

But opponents, including some military leaders, argue that the rebels should be disbanded, permanently disarmed and sent back to their villages, fearing that they would undermine the military and the country's fledgling democracy.

"We fought for a reason," said Ghimire, who lists "national defense" as his only interest on his Facebook page. "We are trained to kill, make bombs and detonate bombs. Now you expect us to go back and plow the farms again?"

At least 12,500 people died, and an estimated 150,000 to 200,000 were internally displaced, during Nepal's 10-year insurgency, which started in 1996. It began as a rebellion by a few dozen men influenced by communist icons Mao Zedong and Karl Marx, and grew into a national movement aimed largely at dislodging the country's centuries-old monarchy.

Under the 2006 peace accord, the rebels agreed to disarm under U.N. supervision and compete in national elections. The Maoists shocked the nation two years later by sweeping elections that ultimately led to the abolition of the 230-year-old monarchy.

The Maoists initially took power in the world's newest republic, in the high-altitude shadow of Mount Everest. Eight months later the Maoists abruptly quit in a dispute over a decision to fire the army chief.

Since then, the Maoists and the ruling parties have been at an impasse -- including over the drafting of a new post-monarchy constitution. Both sides have set a deadline of next year for finalizing the document, but analysts said such deadlines are essentially meaningless in the current political environment.